Moving the Market: The Next Phase of Growth in the Middle East
Operators across the Middle East are rethinking their businesses to capture revenue from new services, new markets and the growing opportunity in cloud.
The changes we’re seeing in the Middle Eastern telecoms market cut across every sector: enterprise, wholesale, cloud, content and data centres. Since Epsilon set up its Middle East office and I relocated to Dubai in 2014, the market has changed a lot and now we’ve reached a really transitional point.
Over the last five years, the market had been ramping up with new infrastructure being rolled out, new undersea cables coming online and telecoms sectors liberalising. It was in a growth phase and now for most operators in the region it is time to decide how they’re going to continue to drive momentum.
They’re being challenged to keep up with a phenomenal pace of change brought on by the cloud and growing competition from non-traditional players and this means rethinking how they approach the market. The good news is that there’s a lot to win and there are more opportunities than ever to differentiate service offerings and compete in new ways.
I’m really excited to see this change happening in the market. A lot of our customers are looking at new ways forward and choosing what opportunities to pursue. That’s exciting. They see that their businesses can be reshaped and that there’s new revenue to capture from growing set of services.
The strategic discussions we’re hearing indicate that the Middle Eastern market is ready for another growth phase but not one defined by infrastructure. It will be defined by services, speed-to-market and serving the cloud.
Connecting the Cloud
The cloud is really rewriting the rules in the Middle East. For years, the Middle East has been called the next big market for cloud and it is finally becoming a reality. Cisco expects the Middle East and Africa to have the highest cloud traffic growth rate in the world between 2014 and 2020 with a compound annual growth rate (CAGR) of 41%.
With that kind of growth, no operator can afford to take a ‘wait and see’ approach any longer. The cloud is real and every year it becomes a greater and greater influence on the market. The challenge for operators is to reshape their businesses to focus on cloud enablement in order to capture growing revenue from cloud services. That isn’t easy but is necessary.
For customers to get all of the benefits from cloud, they need their suppliers to be agile, flexible and ready to deliver in real-time. The barriers to accessing and turning up services need to be removed and operators have to move faster than competitors. The cloud market is more competitive than voice and data have ever been because anyone can enter it and there’s potential for smaller players with a strong product to pop-up and really shift the market.
The opportunity in cloud is too big to overlook but it requires planning and preparation. Operators in the Middle East can capture revenue from cloud and can develop new revenue streams if they can evolve their businesses to serve the cloud.
The Need for Speed
I think the key to this will be increasing speed-to-market. When customers provision networks to support their cloud deployments, they don’t want to wait weeks or even days for their network services. They want to turn up services as fast as they are accessing cloud-based applications.
In the Middle East speed-to-market hasn’t always been a priority but that’s changing. Operators that can deliver services faster than their competitors can win new business and take market share. It enables alternative providers to compete on speed and get a foot in the market while established players can drive stickiness by simply being faster than other players in the market.
We are seeing increased automation in the market and I believe click-to-connect provisioning will be essential to the success of operators in the future. When networks can be instantly accessed and services turned up in minutes or even seconds, operators can serve cloud demand and deliver the agility that customers are looking for.
It sounds simple but I think it’ll take a bit of mind set shift in operators across the region and the ones that take notice will be really successful. Being faster than the other guy can be enough to define an operator’s business and set it apart from the rest.
On the services side, it is a similar thing. Operators across the Middle East are looking at how they develop and deliver new services and partnering is the fastest and most efficient way to do that. I see the market for white-label services growing rapidly in the Middle East. Developing services in-house can be resource-intensive and take 12 months or more.
From cloud connectivity to unified communications, operators in the Middle East are looking at what platforms they can adopt that will allow them to rapidly monetise new services. When they partner with a white-label service provider they can gain all of the capabilities they need without taking on the development costs. They can also deploy services quickly and gain a first mover advantage.
In the case of cloud, we’re seeing operators have a lot of success with cloud connectivity platforms. They can leverage the automation built into the platform to rapidly provision services while also benefiting from performance monitoring that can guarantee quality of service and experience. Partnering with a cloud connectivity platform provider means gaining speed while increasing performance.
For operators in the Middle East, partnering and adopting white-label services can enable them to quickly monetise cloud and serve new demand.
I think this will accelerate growth and be the most efficient way for operators to evolve their businesses.
The Iranian Opportunity
This new agility and speed matters because it enables operators to tap opportunities beyond the cloud as well. As sanctions on Iran are lifted, the country will see new investment and growth in its telecoms sector. Across the Middle East, operators are evaluating how they enter the market and what services they might offer local players.Iran has more than 70 million people and one of the largest populations in the region. There’s an opportunity in serving an increasing number of mobile and internet users and growing enterprises. Bandwidth demand is growing and local businesses and consumers want new services.
Operators entering the market again will be competing on speed-to-market and their ability to deliver the services the market demands. I think how and when operators decide to play in the Iranian market will be a strong indicator of their approach overall. We’ll be able to see which players are moving their businesses towards a more agile model and which ones are sticking with the traditional approach.
Between the opportunity in serving the cloud and serving the Iranian market, the Middle East is seeing a lot of positive change. There are big opportunities for operators that rethink partnering and their approach to cloud and connectivity.
Speed-to-market will define their success with white-labelling enabling them to monetise new services. The barriers to success are less and less and competition is growing. The Middle Eastern market is at a unique point in its evolution and I believe operators have a tremendous opportunity to define their path forward and create new momentum.